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Investing in general practice

February 2003

Chapter 7 : underpinning the contract
7.1 The agreements set out in this document will be underpinned through new contractual mechanisms. This chapter explains the way in which this will be achieved, including:
(i) the nature and contents of the contract

(ii) who can provide services

(iii) vacancies and practice splits

(iv) contract review arrangements

(v) how the list arrangements for professionals will be rationalised

(vi) mechanisms for dispute resolution, and appeals

(vii) the role of LMCs (or their equivalent) and Area Medical Committee GP subcommittees

(viii) changes needed to primary legislation.

Nature and contents of the contract
7.2 The current GMS contract takes the form of statutory arrangements made by the Health Departments of the four countries between PCOs and individual GPs. A fundamental change in the new GMS contract is that in future practices will enter into contracts with their local PCO. This requires the existing statutory arrangements to be replaced. The legal basis of GMS will change for all GMS practices. Subject to the approval of new legislation, existing GMS practices will transfer to the new contract on 1 April 2004. This will not, however, prevent earlier implementation of many of the proposals in this document. Chapter 8 - read more here - sets out what will be introduced in 2003 and what will wait until 2004 because of the need for primary and associated secondary legislation.

7.3 The contract and supporting documentation will set out, either directly or by reference to an external source (eg the Carr-Hill formula), the agreement between the practice and the PCO and will determine:
(i) which services will be provided, in the light of the new arrangements around service commissioning described in chapter 2. Read more here

(ii)the level of quality of essential and additional services that the practice aspires to deliver, as described in chapter 3. Read more here

(iii) the support arrangements to be provided including human resource management, IM&T, premises and support for rural and remote GPs, as set out in chapter 4. Read more here

(iv) the total financial resources that the practice will receive, as set out in chapter 5. Read more here.

7.4 It is expected that the contract will normally take the form of an NHS contract (in Northern Ireland, a Health and Social Services contract) rather than a private law contract, following granting of Health Service Body status. Where there is an NHS contract, this means practice disputes on contractual matters that are not resolved locally will be resolved through the FHSAA(SHA) (or its equivalent) rather than the courts. It is anticipated that most GMS providers will opt for these contracts but no-one will be forced down this route and, if the practice requires, the new GMS contracts can be ordinary contracts at law. Appeals and dispute resolution procedures are considered further in this chapter.

7.5 A UK contract will be published later this year. It cannot be published in full detail at this stage because it depends on the precise provisions of primary legislation to be enacted before April 2004, subject to Parliamentary agreement. The contract will be negotiated between the BMA’s GPC and the NHS Confederation and will set out the contractual obligations under the new GMS contract. Subject to Parliamentary approval, regulations made under new primary powers will underpin these obligations and the main provisions will be in place before 1 April 2004. The UK contract will permit local variations for the provision of local enhanced services.

7.6 The practice-based contract is fundamental to the new arrangements. It will permit the allocation of the global sum monies, and will mean that should a GP within a practice retire it will be for the practice to decide how best to continue to meet its service obligations, rather than the PCO advertising and appointing GPs to vacancies as at present. It will also allow practices to have other primary care professionals including nurses and practice managers sign up as parties to the contract. Whilst partnership law would allow one partner to sign on behalf of the whole practice it is envisaged that all partners will have to sign the contract.

Providers of services
7.7 A number of basic principles underpin the new definition of a GMS practice (the GMS ‘provider’):
(i) a GMS contract is with the provider, made up of one or more individuals who act in their personal capacity

(ii) a provider must always include at least one general medical practitioner holding a Joint Committee on Postgraduate Training (JCPTGP) certificate (or who is suitably experienced within the meaning of section 31 of the National Health Service Act 1977 (or its equivalent))

(iii) a provider must be constituted from individuals from within the NHS though not necessarily from a clinical discipline, for example a practice manager

(iv) a provider unit will, subject to (ii) above, be made up of one or more of the following groups:
- a general practitioner (defined as a registered medical practitioner on the GP Register, subject to the introduction of proposed legislation, or suitably experienced in the interim) together with one or more persons listed in (b), (c), and/or (d)
- a healthcare professional defined as a person who is a member of a profession regulated by one of the regulatory bodies referred to in section 25(3) of the NHS Reforms and Health Care Professions Act 2002, who provides services to the NHS
- an individual employed by an NHS Trust, Foundation Trust or PCT or equivalent body in Scotland, Wales and Northern Ireland; a GMS or GDS contractor or equivalent body in Scotland, Wales and Northern Ireland; a PMS or PDS provider or equivalent body in Scotland, Wales and Northern Ireland
- a qualifying body as set out in the NHS (Primary Care Act) 1997.

7.8 Practices will be permitted to include in their partnership, if they wish, other healthcare professionals such as nurses, pharmacists (where there is no conflict of interest and there is no interest held on behalf of a commercial body), allied health professional and non-clinical NHS staff such as practice managers. The fundamental issue is that there must be a GP in the constitution of the partnership and as one of the contract signatories.

7.9 Although there will not be a list of suitable providers along the lines of the existing medical and supplementary lists, which are focused primarily on suitability to practise, there will be a mechanism to prevent totally unsuitable individuals from contracting to provide GMS. Purely by way of illustration these might include those with a serious criminal history, for example those guilty of serious arrestable offences; of questionable financial standing, for example undischarged bankrupts; or with a record of serious disciplinary action by their professional body or serious internal NHS disciplinary action, for example a national disqualification by the FHSAA, or persons who have been convicted of an offence in the Schedule to the Children's and Young Person's Act 1933. The actual conditions that might de-bar a provider will be subject to full consultation with the profession as part of the implementation process.

7.10 Whilst it is highly desirable that every practice should have an effective partnership agreement, the absence of such an agreement cannot prevent the PCO awarding a practice a contract as in the absence of an agreement the provisions of the Partnership Act 1890 will apply. It is anticipated that the GPC will produce a model partnership agreement.

Alternative providers
7.11 As described in chapter 2, subject to primary legislation, PCOs will be able to commission or directly provide primary medical services. This ability will sit in law alongside the GMS and PMS statutory arrangements. It will facilitate practices opting out of additional services and will help prevent the assignment of patients to practices that are not accepting new registrations, as described in chapter 6. This will also ensure that the PCO has maximum flexibility to commission enhanced services from other providers. The ability to commission primary medical services from alternative providers includes private sector organisations. PCOs currently have this ability in relation to hospital and community health services.

7.12 Use of alternative providers for essential primary care is also possible, for example, employing GPs in walk-in centres in England. Some practices may choose to enter into specific funded agreements with, for example, walk-in centres on a voluntary basis to help them achieve improved access and clinical standards or to deliver services such as vaccinations and immunisations. In these cases, unless the practice has ‘opted-out’ of the provision of a certain additional service they will continue to be funded for this service from the global sum.

Vacancies and practice splits
7.13 Subject to there being at least one GP in every practice, the new contract will take the form of a ‘rolling’ contract which will allow partners to retire and allow new partners to join the practice on the basis of continuing obligations on each of the PCO and the provider practice. It may be necessary for the contract to be linked to the practice partnership agreement in order to achieve this. In most cases this will overcome the need for a substantial variation when a provider leaves a practice or when a new provider joins a practice, subject to there being at least one GP in each partnership. It represents an opportunity to delineate more clearly the practice as an autonomous provider of services, with greater flexibility to determine for itself the workforce necessary to suit the needs of its population and the desired work patterns of its workforce. When making changes to the working practices of nurses and other healthcare professionals, the practice will be expected to involve them in the decision-making and to seek advice from the relevant professional lead in the PCO.

7.14 Where there is a retirement or a new partner, the GMS provider may decide to continue to provide the services within the terms of the contract by, for example, recruiting a replacement GP or a nurse practitioner, or by increasing the hours of the practice nurse and engaging another health professional. The flexibility is owned by the practice and the global sum will not vary unless the services are varied eg if the practice opts out of a service.

7.15 In the event of a more substantial practice split, for example into two groups of three practitioners each, the existing contract would come to an end and the two groups would each seek a new contract with the PCO. Whilst most contract changes will come about through the ‘rolling’ mechanism described in paragraph 7.13 there will inevitably be occasions where there is a partnership ‘split’ resulting from a disagreement between the partners or from the expulsion of one or more partners.

7.16 Whilst an expulsion in accordance with the terms of an effective partnership deed will bring about the compulsory retirement of a partner when the ‘rolling’ principles will continue to apply, there may be a practice split which either comes about from the dissolution of a partnership at will or where various members of the partnership wish to reform into two or more separate groups. In both such cases the contract will terminate at the time of dissolution.

7.17 Where a substantial partnership splits into two or more groups it will probably be by agreement and sufficient notice can be given to PCOs so as to permit the timely establishment of new contracts with the continuing groups. At the same time, there should be sufficient opportunity for the practice patients to be fully informed of the new arrangements. Where, however, there is a partnership split in a two or three partner practice it can often happen without any notice and considerable problems can arise in ensuring continuity of care for patients. It is expected that in the event of partnership splits the PCO will wish to establish a temporary contract arrangement with each of the practitioners who were formerly in partnership, whilst reaching a clear understanding about patient needs and their wishes to register with one or other of the disputant doctors.

7.18 As part of the understanding, the PCO will normally agree to grant a new formal contract after a specified period of time to each of the doctors. Guidance will be issued on how to manage this process and the procedures will include consultation with the LMC (or its equivalent). To ensure continuity of patient care at the time of dissolution the new temporary contract will provide that, save in case of agreement with the PCO, the temporary services will normally continue to be provided from the practice premises that were in use at the time of the dissolution.

7.19 When a single-handed GP resigns, the PCO would still have an obligation to ensure the provision of primary medical services to that former GP’s patients. The PCO could discharge that duty by entering into a contract with existing or new providers, or deliver primary medical services itself. Whilst the concept of a statutory vacancy will disappear, the LMC (or its equivalent) will be consulted about all proposals in relation to the retirement of a single-handed practitioner and greenfield sites and any existing affected patients will be kept informed.

Greenfield sites
7.20 Significant increases in local population may warrant a need for additional providers of essential and additional services in an area and the PCO has an obligation to ensure provision of primary medical services to its population. The PCO could advertise locally and/or nationally the need for a practice in the area and seek applications, through a two stage process: first, competition between GMS and PMS practices which would have preferred provider status, and then open competition. The PCO would normally contract for such services through a variation to a contract with an existing GMS or PMS provider which has a preferential right to provide such services if it so wishes. However, in stage two, the open competition stage, the PCO could commission it from another potential provider. The LMC (or its equivalent) will be consulted.

To support the new arrangements around opt-outs and patient assignments, the PCO’s ability to provide primary medical services itself including through PCO-led greenfield site provision, subject to the rules set out in chapter 2, would not be circumscribed by this process.

Sale of goodwill
7.21 The existing arrangements prohibiting the sale of goodwill of a medical practice – including so-called deemed sales in the form of unfair partnership agreement - will continue.

Contract review
7.22 The contract will be subject to a formal review process based on the principle of high trust. Although this process is distinct from the quality review process set out in chapter 3, the contract review could be carried out at the same visit so as to minimise disruption to the practice if the practice wishes. Funding for the contract review process has been built into the global sum.

7.23 The review will be based around an annual return from the practice submitted on a standard electronic pro-forma, including declaration by the practitioners/partners in the practice that they have met their statutory and other mandatory responsibilities under their contract.

7.24 There will also be an annual review, typically involving a visit. This will include a review of the practice workload based on self-appraisal by the practice. Where a practice considers its workload is so excessive it may be considering opting out or closing its list, this review allows a discussion of the practice capacity. Alternatively, it also provides the opportunity for the practice to discuss with the PCO opportunities for expanding its services.

7.25 Increasingly as the new contract moves into further years, this discussion will be strongly evidence-based allowing the PCO to comment, offering its view of the previous year, drawing on comparable experience of workload in other practices, techniques for reducing workload, and a discussion about what levels of support the practice might expect or desire. At this point there will be a formal agreement if the practice wishes to withdraw from any form of service provision in line with the usual opt-out process. There will always be an opportunity for in-year discussions about contract variations etc when required, and practices will retain their option to close their list outwith this review.

7.26 The review will be followed up in writing by the PCO and the practice will be given an opportunity to comment on a draft. Either party to the contract can choose to have a representative of the LMC (or its equivalent) to support it in both the contract review and/or the quality review.

7.27 PCOs must not neglect the informal process of developing and maintaining where appropriate a sustained empathetic relationship with the practice based on the principle of high trust and understanding the practice’s needs, pressures and aspirations, which may change in year.

Remedial notices
7.28 Where the PCO believes, with reasonable cause and justification, that in any particular case:
(i) the provider has failed to perform the service, including failure to meet minimum standards in accordance with the provisions in the contract; or

(ii) is otherwise in breach of the contract.

7.29 The PCO and provider will consult or use all reasonable endeavours to agree how the breach or failure should be resolved. Either party may invite the LMC (or its equivalent) to be involved in the discussion. Following this discussion, the PCO will issue a notice informing the practice in writing of the action to be taken, where possible, to resolve the breach or failure within a timeframe to be determined by the PCO. Unless the PCO believes patient safety is at serious risk or there is serious financial impropriety, the timescale will not be less than 28 days.

7.30 Where a notice has been served and the practice does not comply within the agreed timescale, or where the breach is so serious it is not possible to resolve, there are a number of options open to the PCO. It may:
(i) seek alternative provision at the cost of the original provision at the expense of the original provider until the relevant service can be re-provided by the practice within the original terms of the contract; and/or

(ii) terminate the contract in respect of that part of the service subject to the remedial notice; and/or

(iii) withhold and/or deduct monies which would otherwise be due and payable under the contract to the practice in respect of the element of the service not performed in accordance with the contract; and/or

(iv) charge the practice the costs of additional administration in connection with any default on their part; and/or

(v) terminate the contract.

7.31 Should any of the above be required, the PCO will consult with the LMC (or its equivalent) whenever any of these steps are to be taken but the PCO reserves the right to take reasonable urgent action where patient care or safety may be at risk or where there is a serious risk to public funds.

7.32 Unsatisfactory performance by an individual GP will be dealt with either through the monitoring, appraisal and revalidation arrangements to which all GPs will be subject or, through the disqualification procedures presently set out in section 49 et seq of the 1977 Act in England and Wales, sections 29 to 32E of the 1978 Act in Scotland, and Schedule 11 to the Health and Personal Social Services (NI) Order 1972.

Rationalising performer lists
7.33 At present there is provision for three separate list arrangements for GPs: the Medical List for GP principals, the Supplementary List for non-principals and locums, and the forthcoming Services List for PMS providers. Inclusion on one of these lists is a precondition of GPs performing primary medical care to patients. In England and Wales, subject to legislation, these three lists will be merged into a single primary care performers list. The Scottish Executive and the Northern Ireland Health Department will announce their respective plans for future listing arrangements in due course. Consideration will be given to the desirability of extending the new list over time to other primary care practitioners under GMS or PMS arrangements to reflect the practice-based approach.

Right of return
7.34 Following legislation, PMS practices will have the ability to move to GMS on a practice basis, and vice versa.

Indemnity cover
7.35 The cost of indemnity cover has been factored into the global sum and the compulsory introduction of indemnity cover will be brought in through successor arrangements to section 9 of the Health Act 1999, to reflect the practice basis of the new contract.

Dispute resolution and appeals
7.36 The Devolved Administrations are fully committed to the principles which underpin the mechanisms set out below, but these mechanisms will have to be tailored to be compatible with the administrative and organisational structures that pertain in each country.

7.37 As with the existing arrangements that govern the relationship between the PCO and providers of GMS there will continue to be occasions where it becomes necessary to resolve disagreements between the respective parties. Following the introduction of the new GMS contract we envisage these being categorised as either a ‘dispute resolution’ or as an ‘appeal’. These two categories have different characteristics and need to be clearly distinguished.

7.38 A dispute resolution procedure is needed to resolve issues that arise within the contract, for example a dispute as to whether a contract provision has been properly performed by either the PCO or the providers, or a dispute involving financial entitlement under the contract.

7.39 An appeal mechanism is needed to deal with matters that arise outside the contract. These will largely relate to matters that deal with the relationship between the PCO and an individual GP. However, the appeal mechanism would also be appropriate where there are disagreements between the PCO and the GMS provider that do not involve matters that relate to contractual terms, obligations or rights.

Dispute resolution
7.40 The relevant dispute resolution procedure is dependent on the nature of the contract held by the GMS provider. The contract might be an NHS contract or an ordinary contract for services. Contractual disputes are considered under three headings:
(i) disputes where the contract is an NHS contract

(ii)disputes where the contract is an ordinary contract at law

(iii) pre-contract disputes.

7.41 These procedures will apply to all disputes that relate to matters relating to contractual terms including:
(i)payments, including the global sum and quality payments, due under the contract

(ii) contract variations

(iii) opt-outs and list closures

(iv) contract termination

(v) disputes as to contract compliance.

7.42 As is the case with PMS, practices will have the right to elect whether or not to become an NHS body.

7.43 If a dispute arises between the parties to this agreement they shall try to resolve the dispute locally in the first instance. If necessary, this should include a conciliation meeting between the provider and the chief executive of the PCO and, where it appears appropriate, could include an appropriately qualified/skilled adviser. At the time of conciliation either one or both of the parties may request the presence and assistance of the LMC (or its equivalent).

7.44 Conciliation cannot be a mandatory precursor to formal dispute resolution. However, there is an expectation that both the PCO and the GMS provider will be encouraged to follow this route as it provides a speedier and more efficient method of resolving disputes. Where the dispute is not resolved through local conciliation then the appropriate procedure will apply.

NHS contract
7.45 A practice will have the option of becoming a Health Service Body. The PCO would decide the application. If Health Service Body status were granted, the GMS contract would then have the status of an NHS contract (in Northern Ireland a Health and Social Services contract). Such contracts are primarily governed by section 4 of the NHS and Community Care Act 1990 or equivalent and the NHS Contracts (Dispute Resolution) Regulations 1996 (SI 623/1996). It is expected that most practices would choose to enter into NHS contracts.

7.46 Such disputes are resolved by the Secretary of State (or equivalent) or by a person appointed by the Secretary of State (section 4(5) of the 1990 Act) or the Health Department in Northern Ireland. The FHSAA(SHA) (or its equivalent) would normally be appointed to resolve all such disputes. Where, however, it is important to factor local knowledge into the process of adjudication the Strategic Health Authority (or its equivalent) may be appointed. These cases involve list closure, patient assignment and adherence to opt-out procedures.

7.47 Where the Strategic Health Authority (or its equivalent) is to be appointed as adjudicator the Authority must, to preserve its independence, have played no part in the local dispute resolution process.

Ordinary contracts
7.48 Where a practice opts for an ordinary contract at law they will have the option of asking the courts to resolve any resultant contractual disputes.

7.49 However, it is the intention to provide an optional internal dispute resolution procedure. Whilst the use of such adjudication will be optional, its availability will be mandatory. The process will be modelled on the existing PMS procedure, which draws heavily on the NHS contract dispute resolution procedures. Ordinary GMS contracts, which are contracts at law, will be required to include a clause that provides for dispute resolution involving binding adjudication by the Secretary of State or the Health Department in Northern Ireland. The practice therefore will have a choice of routes when there is a difference that cannot be resolved locally; either the courts or binding adjudication.

7.50 Where the dispute is referred for adjudication, the dispute would ordinarily be referred to the FHSAA(SHA) (or its equivalent). In certain circumstances, however, the Strategic Health Authority (or its equivalent) would be asked to adjudicate.

Pre-contract disputes
7.51 In the early stages where initial contracts are being negotiated the potential GMS provider is unlikely to be a Health Service Body. It is therefore the intention that primary legislation will provide by subsequent regulation for the potential GMS providers to have access to adjudication in relation to a dispute that relates to the terms of a proposed GMS contract in a manner that is equivalent to the system outlined above. The outcome of the adjudication will be binding where a contract is subsequently signed but it cannot be used to force a potential GMS provider to enter into a contract.

Appeals
7.52 There will potentially be only a limited number of areas where a dispute might arise in an area not dealt with under the contract or pre-contract resolution procedures. These would include the right to perform GMS (ie matters to do with the primary care performers list).

7.53 Appeals will be dealt with at three different levels. In the event of an appeal against a decision made at level one, the appeal would be referred to level two.

Level one
7.54 The first level will involve local resolution of those non-contractual issues. This would be a process modelled along the lines of the existing paragraph 80 of the Statement of Fees and Allowances (SFA) requirements. This process will allow a practice to make representations to the PCO relating to the decision that is being disputed. As with the existing SFA procedures the local adjudication procedures will not be set out in regulations. However, subject to local agreement, it is envisaged that the aggrieved practice will have access to a PCO local review panel. The PCO local review panel could comprise the chairman of the PCO, an LMC (or its equivalent) or GP subcommittee appointed member, and a lay person but could vary eg according to the nature of the dispute.

Level two
7.55 Appeals at level two would relate to matters which remain in dispute when the level one procedure has been exhausted. Such appeals will normally be dealt with by the FHSAA(SHA) (or its equivalent).

Level three
7.56 At the highest level appeals will lie with the FHSAA(SHA) (or its equivalent). Such appeals will deal with issues such as a practitioner’s right to have his or her name entered on a primary care performers list and comparable rights related to a practitioner’s right to perform GMS.

Local Medical Committees (LMCs) and their equivalents
7.57 The role of LMCs (and their equivalents) and GP subcommittees of Area Medical Committees under the new contract arrangements will be analogous to their existing role in each of the four countries. Under the new contract, the LMC (or its equivalent) will be involved in decisions to assign patients to practices with closed lists through the new panel arrangements. At the request of either party it could be involved in contract review or quality assessment visits, and local dispute resolution. It will also be informed of local variations to practice contracts, practice splits and the establishment of new practices including greenfield sites, breaches or failures of the practice contract, proposed commissioning arrangements for enhanced services, and re-provision of additional services when a practice has opted out.

7.58 The existing arrangements in section 44 (recognition of local representative committees) and section 45 (functions of local representative committees) of the National Health Service Act 1977 (or equivalent) will be continued in a form which will provide for the continued recognition of local representative committees and the collection from practices and the allotment to local representative committees of sums necessary for defraying the committee’s administrative expenses.

Primary legislation
7.59 To enable implementation of the new contract, we envisage that primary legislation provisions will be brought forward following the outcome of the ballot of GPs. We anticipate this will include:
(i) repealing and completely replacing the existing GMS legislation in part II of the NHS Acts 1977 and 1978

(ii) placing a duty on PCOs as regards the provision of primary medical services, to underwrite the Patient Services Guarantee whilst ensuring sufficient flexibility for services to develop in line with changes in medical technology and provision

(iii) allowing PCOs directly to provide primary medical services, or commission care from alternative providers, to support the opt-out arrangements and help obviate the need for assignment of patients to closed lists

(iv) allowing PCOs to provide support to GMS practices

(v) providing a legal definition of a GMS provider, and allowing them, should they wish, to be Health Service Bodies able to enter into NHS contracts with PCOs

(vi) setting out regulation-making powers to specify what must be included in a GMS contract, including provisions that will underpin the working definitions of essential and additional services

(vii) providing for existing funding arrangements to be replaced by provisions comparable to those which underpin the allocation of unified budget resources, to implement the new funding arrangements including allocation of global sum monies to practices

(viii) rationalising the existing professional list arrangements for England and Wales.